The Irish Exporters Association (IEA), the representative body of the export industry in Ireland, welcomes the government’s support geared at SMEs and business start-ups, the changes in USC and preservation of Ireland’s 12.5 per cent corporation tax rate in in Budget 2017; however, more could have been done for indigenous Irish Companies and the Farming sector to prepare for challenges that face exporters with the UK’s Brexit decision and Irelands ability to compete internationally.
Simon McKeever, Chief Executive, Irish Exporters Association commented: “We are pleased to see some support for exporters in the 2017 budget, however we are disappointed that the budget did not go far enough to support indigenous Irish companies’ ability to compete internationally. Maintaining and improving our national cost competitiveness; combat the war for talent; broadening our export base and diversification of export markets; and encouraging and fostering entrepreneurship were outlined in our pre budget submission to government. While the budget has provided some support for exporters, it does not place us at the forefront to compete internationally which is disappointing.
Whilst paltry, we welcome the reduction to the three rates of Universal Social Charge. The 1 per cent to reduce to 0.5 per cent, the 3 per cent level to reduce to 2.5 per cent, and the 5.5 per cent level to reduce to 5 per cent. This reduction is a step in the right direction but, more must be done if we are to retain and attract the best talent, so we look forward to the government going further in next year’s budget to phase out USC, increase the band ceiling and the exemption threshold to reduce very low earners altogether. Similarly, the reduction in the rate of Capital Gains Tax for entrepreneurs (Entrepreneurs Relief) from 20% to 10% is welcome, but does not bring us onto the racetrack. From a competitiveness point of view the rate is now the same as in the UK, but the €1m ceiling here is laughable compared to the ceiling of £10m in the UK. We also believe that the increase in the Earned Income Tax Credit by a mere €400 to €950, which the Government says will benefit over 147,000 self-employed people is a real sucker-punch to them. If they wanted to engage in mere tokenism could they not have at least doubled it? In a situation where exporters are beginning to look at shifting production to the UK in order to secure their sakes there, we need to ask what signal this Government is really sending out to the people who are creating the greatest share of employment in this country.
We are disappointed by the discouraging measures against the farming and fisheries sector and we do not welcome the increase in farmers VAT flat-rate from 5.2% to 5.4%. Despite this we have seen some steps to encourage the sector with the extension of the farm restructuring relief scheme to be extended to end-2019 and a new income averaging ‘step out’ for farmers to commence immediately. We also welcome a new fisher’s tax credit of €1,270 per year.
As an export nation we continue to urge the government to put measures in place to support Ireland domestically and internationally. While external factors such as a weak euro and low oil prices are currently working in our favour, there are clear signs of a slowdown in some of our key markets. We need to put measures in place to be able to weather the storm, particularly in the current Post Brexit environment – we cannot rely on the UK.
The IEA is disappointed that more has not has been done in relation to protecting business against Sterling depreciation, restraint in public pay, the war for talent and that Enterprise Ireland, Bord Bia and our Embassies did not receive further funding to increase resources in high-growth markets specifically. Finally, we believe that the IEA should be given a specific role for a campaign in partnership with Government & funded by them to drive our exports.”
